Digital Marketing offers us predictability, reliable content, measurable ROI, and is still cheaper. In other words, we have the chance to optimize our budget and boost our results through this type of calculation.
Return on Investment – ROI , which in Portuguese means return on investment , is an important indicator because it shows us how much money we have earned or lost — and this gives us the chance to check which investments are, in fact, worth it.
What is the recipe?
Include everything the company collected from sales . In the case iran phone number resource of the marketing sector, consider all conversions (sales) generated from the campaigns implemented.
What is the cost?
In general, this refers to all expenses necessary to make the sale viable , which may involve both the marketing and sales departments.
One approach I often use when I'm starting a new project is to simulate the cost per click of the main keywords for a company. This way, we can estimate how many clicks fit within your budget.
By knowing the number of clicks that fit within a budget, we can estimate the traffic generated for the company's page and, by combining this number with the company's history or a market average, it is possible to know how many customers that campaign will be able to generate based on the conversion percentage.
Imagine that the average CPC (cost per click) is R$2 and that the conversion of visits to the company's page/sales is 1.5%. If the company invests R$2,000 in paid media, it will be able to generate 1,000 visits (R$2,000 / R$2) and will probably have 15 sales (1,000 visits x 1.5% = 15 sales).
How to calculate?
The formula is very simple, so anyone can use it to find informed answers.
ROI = revenue – cost / cost
Let's go back to the case of the law firm specializing in Real Estate Law, but adding some numbers. In the first quarter of 2017, if he invested R$3,000 per month in media, paid the agency a monthly fee of R$1,000 for campaign management and converted 2 new clients per month (an average of R$12,000 for each new contract). So, let's look at the calculation for the quarter:
Quarterly Cost = R$3,000 + R$1,000 = R$4,000 x 3 = R$12,000
Quarterly Revenue = 2 x R$ 12,000 = R$ 24,000 x 3 = 72,000
Quarterly ROI = 72,000 – 12,000/12,000 = 5
This means that the return on investment was 5 times greater. If we multiply this result by 100, we will have a revenue of 500% of the investment value. Therefore, the investment generated a profit, not a loss.